Weekend Reading on Your Federal Benefits 10-18.jpg

(for the week of March 3rd – March 9th)

You’re too busy during the week to keep up on all the news around your employee benefits and pay. My weekly summary of the most interesting and relevant news stories could help you and includes my comments and insights.

By the way, if you’ve read something about your employee benefits that you think is important or interesting, share it. And, let me know about news sources that you follow. Have a great weekend.

George Ray
Federal Benefits Online

In this week’s Federal benefits news, OPM finally has a permanent director, the retirement tsunami is still missing, the TSP got a low score on its security audit, and we learn some fun facts about Federal retirement. Let’s get started.

OPM Has a New Permanent Director

From Fedsmith.com

OPM has been without a permanent director since Katherine Archuleta left in 2015. After having his nomination held up since September 2017 by Senator Ron Johnson (R-WI), Dr. Jeff Pon was confirmed this week as OPM’s new director. He has a distinguished background having most recently served as the Chief Human Resources and Strategy Officer for the non-profit professional membership organization, the Society for Human Resource Management. He is also a former Chief Human Capital Officer for the Department of Energy. We hope that he brought his ‘vision’ glasses with him, and is ready to get started on that stack of stuff that’s been sitting for a while on his new desk.

Though More Feds Retired in 2017 Compared to the Previous Year, It Hardly Triggered a ‘Tsunami’

From federalnewsradio.com

This article from Federal News Radio’s Nicole Ogrysko also includes an audio interview that she did with Tom Temin of Federal Drive. So, you can read or listen or both.

We’ve been talking about the Federal retirement tsunami for years primarily because a large percentage (31%) of the Federal workforce is eligible for retirement. Certainly, with the current challenges (Congress trying to cut benefits, agency budgets being cut, etc.), you’d think we’d see a larger number of Feds retiring. There were about 4,000 more claims this February than the previous February, and the retirement backlog now stands at 24,225-- its highest since January 2014. But, the Federal retirement tsunami hasn’t arrived yet. Why?

Some are saying that Feds are still working to gain back the losses that they took to their TSPs during the 2008 market crash. Ten years later, we’re finally regaining what many may have lost at that time. There’s also the belief that lots of people are just really dedicated to their mission. They appreciate the importance of what they do and know that the government continues to struggle with bringing in the next generation of employees. They don’t want to abandon their post just yet since no one may be able to come in behind them to do what needs to be done.

But Nicole did talk with several new retirees and got their stories on why they decided to leave. Former letter carrier John Ciszczon just had enough after walking his 12-mile delivery route every day. Some, like Jim Downing at the EPA and Gary Spegal at the Defense Department’s Aberdeen Proving Ground accepted buyouts that were offered to them. Marcia Bailey, an EPA scientist, was disappointed in changes in her work environment, particularly morale. She indicated that it wasn’t the current administration that caused the issues—they had been building for some time. Have you thought about when you’ll retire? Do you have your date set? Or are you waiting for a certain set of circumstances? Still no tsunami.

TSP Scores Low on Information Security Audit

From govmatters.tv

In this 6-minute video interview with host Francis Rose, Kim Weaver, Director of External Affairs at the Federal Retirement Thrift Investment Board discusses why the Thrift Savings Plan received the lowest score possible (1 out of 5) on its compliance with FISMA security policies. FISMA is the Federal Information Security Modernization Act which was passed in 2014 as a response to the increasing cyber-attacks that agencies were experiencing on their data. Kim indicates that the audits only reflect the previous fiscal year’s improvements, and new improvements (which the TSP Board has been working on diligently) won’t be reflected until they’ve been in place for a full year. So, it’s likely that the changes being made now won’t be reflected until two years from now after they’ve already been in place for a full year (and get noted in the following fiscal year’s report). Got it?

From your perspective, know that the TSP folks are aware of cybersecurity issues and are continually working to keep your account safe (even if their efforts aren’t yet reflected in a number score); however, that doesn’t mean you shouldn’t also be responsible. Protect your password and change it regularly. Limit who has access to your password and account. Be watchful for phishing scams by phone or email where someone attempts to get your information by posing as someone from the TSP, human resources, or your agency. And review your account and its activity frequently. As Sergeant Phil Esterhaus in Hill Street Blues used to say ‘Let’s be careful out there’.

8 Fun Facts About Federal Retirement

From govexec.com

Tammy Flanagan provides some fun facts about your Federal benefits in her column for Government Executive this week. I’m not sure that they’re all that much fun, but they certainly are interesting. Most of the facts I’m familiar with already (and you may be too) like the TSP is the largest employer-sponsored savings plan. That makes sense because the Federal government is the nation’s largest employer (Walmart is a distant second). And I think that most folks know that their TSP distributions will be taxed as ordinary income at retirement (except for the Roth contributions that satisfy the Roth regulations). And, yes, we kind of know that older adults are working longer, your FEGLI insurance is not always the cheapest option, and you’ll get a much larger Social Security check if you wait until age 70 to take it (you’ll just likely get it for fewer years).

What I found the most interesting was the first fact which mentions that the Federal retirement system is almost 100 years old. It was created in 1920 so will have its centennial birthday in 2020. But what took me down the rabbit hole was the link she included in that fact. It leads to a book called “The History of the Federal Civil Service – 1789 to the Present”. Google scanned the book as part of their controversial Google Books Library Project (it was obtained from the University of Michigan library). There is some really interesting stuff in it— at least I thought so.

As I was scanning through it something popped into my head. In the early days, the pension program was much different than it is today. Many changes were made to increase the benefits and the value of the program to employees. The image that came to mind was that of a small wave, building with new benefits changes, getting larger and larger as it moved toward the shore. Today, you’re like a surfer riding inside of the curl of that big kahuna wave (a word my wife would probably challenge when we play Scrabble) as it comes into shore. So far, you’re staying just in front of the curl, but the chances are getting greater that you won’t be able to keep outrunning it and it could come crashing down on top of you. I hope my image is faulty, but in the meantime, keep riding that wave as long as you can.

See you next week. Mahalo!

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